Detroit pursues Chapter 9 municipal bankruptcy

Detroit Emergency Manager Kevyn Orr addresses the press with Detroit Mayor Dave Bing after an announcement that the City of Detroit is pursuing municipal bankruptcy, July 18. (Tanya Moutzalias | MLive.com)

The document, signed by Orr and a Jones Day attorney, lists city-owned properties and includes a letter of approval from Gov. Rick Snyder, who cites a "failure to obligations to citizens."

"The city's population has declined 63 percent from its peak, including a 28-percent decline since 2000," Snyder writes in the letter. "That exodus has brought Detroit to the point that it cannot satisfy promises it made in the past...

"I am also convinced that Mr. Orr has exercised his best efforts to arrive at a restructuring plan with the city's creditors outside of bankruptcy, to no avail."

Orr had been trying for weeks to get banks, unions, pension boards, bond holders and other debt holding entities to agree to accept a fraction of what they're owed.

Snyder appointed Orr in March to address the city's ballooning debt, estimated at the time at about $14 billion. That estimate is now approaching $19 billion.

Debt service obligations have crippled the city's ability to provide basic services and Orr has halted some of those payments while asking creditors to take massive concessions.

The city's General Retirement System and the Police and Fire Retirement System filed a lawsuit this week seeking to protect retiree benefits by challenging the authority of Snyder and Orr to file bankruptcy on behalf of the city.

That move and two earlier lawsuits filed by groups of workers and retirees indicated that bankruptcy was on its way.

There were reports that the filing would come Friday, but the document appeared in federal court records Thursday afternoon.